Category: Leaf

  • Zimbabwe’s sales close

    Zimbabwe’s sales close

    Zimbabwe’s flue-cured-tobacco sales-season has ended with grower prices on about US$2.97 per kg, according to a story in The New Zimbabwe.

    The average price was up by about US$0.03 per kg, or one percent, on that of both 2015 and 2016, US$2.94 per kg.

    But it was down significantly on the 2008 average price of US$3.24 per kg.

    Volume sales this season, at 185.6 million kg, were said to be down by 7.3 percent on those of the previous season, due to unhelpful weather.

    The target for this season had been 215 million kg.

    The Tobacco Industry and Marketing Board (TIMB) said growers had been paid $551 million for their tobacco.

    In February, the Zimbabwe Farmers’ Union said it expected flue-cured tobacco prices to be ‘favorable’ this year.

    The quality of the crop was said to be excellent and so grower prices, which buyers say are based on quality, should have been excellent also.

    At that time, growers believed that prices ranging between US$4.00 and US$5.00 per kg would be favorable.

    Such prices, they said, would allow them to break even and to continue producing flue-cured tobacco next season.

  • Play it again, Sam

    Play it again, Sam

    Farmers are being encouraged to follow ‘proper methods’ in growing their tobacco in a bid to produce quality leaf and realize ‘significant earnings,’ according to a Capital Radio Malawi story.

    But while the story suggested that quality was the key to ‘significant earnings’; it suggested too that the fall in prices that had occurred was due to tobacco-product volume declines.

    ‘The tobacco industry is facing numerous challenges on the international market, due to the anti-smoking lobby championed by the World Health Organization (WHO),’ the story said.

    ‘This has led to a decline in prices as well as markets for the crop, which is Malawi’s major foreign exchange earner.’

    The Capital Radio story said that during the 2016/2017 growing season, Malawi had reduced the quantity of tobacco it had produced from that of previous years, without saying by how much.

    The story did not say, either, how the average grower price this year had compared with that of previous years when more tobacco had been grown.

    The story did say, however, that this year’s market, which opened in April and closed last month, generated US$199 million, down US$77 million or about 28 percent from that of 2016, $276 million; and down US$138 million or about 41 percent from that of 2015.

    The Tobacco Control Commission’s acting CEO, David Luka, was said to have told Capital FM, that ‘despite low production, the quality of the leaf improved this year’.

    Luka said this was mainly because farmers were now using certified seeds, and were properly monitored and inspected.

  • Leaf self-sufficiency sought

    Leaf self-sufficiency sought

    Iran has made plans to increase the land it has under tobacco by 500 percent, according to a story in The Financial Tribune citing the Islamic Republic News Agency and quoting the head of the Tobacco Planning and Supervision Center, Ali Asghar Ramzi.

    About 20 percent of Iran’s leaf tobacco requirement is domestically produced, and the country plans to become self-sufficient.

    Imported tobacco is said to be 30-40 percent more expensive than is local leaf.

    Almost 65 percent of the more-than 5,000 tons of tobacco produced in Iran is grown in the northern province of Golestan, according to Hosseinali Qavanlou, head of Golestan’s Industries, Mines and Trade Organization.

    Meanwhile, annual cigarette consumption in Iran stands at 55 billion.

    The domestic production of cigarettes reached 45 billion in the most recent Iranian year (March 2016-March 2017), close to 15 billion more than the production of the year before.

    Ramzi said plans were underway to increase the local production of cigarettes to 50 billion this year.

    He said that 14.8 billion cigarettes were produced in Iran during the first four months of the current Iranian year that started on March 21, up 37 percent on the production of the corresponding period of last year.

    About 960,000 cigarettes were imported and 2.6 million were smuggled into the country during the same period, figures that were down 66 percent and 44 percent respectively year-on-year.

  • Leaf price up 3¢ per kg

    Leaf price up 3¢ per kg

    The average grower price paid for Zimbabwe’s flue-cured tobacco is so far running at US$0.03 per kg ahead of that paid during the previous season.

    Figures issued by the Tobacco Industry and Marketing Board (TIMB) show that, so far this season, growers have sold 182.3 million kg of flue-cured tobacco for US$540.9 million, according to a story in the Zimbabwe Chronicle relayed by the TMA.

    At the same stage of the previous season, growers had sold 196.6 million kg for US$578.5 million.

    Zimbabwe’s sales season is drawing to a close with the expectation that 206 million kg of flue-cured will have been sold by the time it ends.

    The country’s tobacco growers sold 201 million kg in 2016.

    Early last month, the TIMB reduced the number of selling days to two – on Tuesdays and Thursdays – and later in the month it reduced them to once a week, on Wednesdays.

    In a statement towards the end of July, the TIMB board said final clean-up sales would be held on August 11.

  • Financial support needed

    Financial support needed

    The Tobacco Board of Zambia (TBZ) says a lack of financial support is affecting farmers’ ability to grow tobacco, according to a story in the Zambia Daily Mail.

    Last year, Zambia sold 23 million kg of tobacco, which contributed about three percent to the country’s gross domestic product.

    Teddy Chirwa a tobacco inspector with the TBZ’s Southern Region, said most farmers were unable to grow tobacco because it was labor-intensive and involved a high production cost.

    During an interview at the 91st Zambia Agricultural and Commercial Show, Chirwa said improving access to finance could increase farmers’ investment choices and provide them with more effective tools to increase yields.

    Chirwa said there was a need for policies that would support the growth of the tobacco industry in the country.

    He was said to have bemoaned the low tobacco-consumption level in the country, and the fact that currently farmers depend on China, the only export destination.

    Commenting on the theme of this year’s agricultural show, Promoting a green economy, Chirwa said the TBZ would continue to promote a green economy through sustainable agricultural practices in the tobacco value chain.

    The TBZ was encouraging small-scale growers to use efficient irrigation technologies in tobacco production, and was calling for the use of ‘climate-smart and environmentally-friendly agro-chemicals in various productions’.

    “There is need to promote alternative and more efficient tobacco curing methods by embarking on a tree planting exercise in the tobacco value chain to promote a green economy,” Chirwa said.

    “As a country, we also need to strengthen re-afforestation programs and smart agriculture practices for tobacco production to support economic growth,” he said.

  • Burley in short supply

    Burley in short supply

    Universal Corporation believes that worldwide demand for Burley tobacco might exceed supply.

    “We are currently forecasting worldwide Burley tobacco production levels for fiscal year 2018 of about 510 million kg, a reduction of approximately 13 percent from fiscal year 2017 levels,” said George C. Freeman, chairman president and CEO. “As a result, we believe that demand for Burley tobacco may slightly exceed supply.”

    Freeman was announcing Universal’s results for the first quarter of fiscal year 2018, which ended on June 30.

    Universal reported net income of $3.6 million, or $0.14 per diluted share, for the quarter. Those results were up $9.1 million from a net loss of $5.5 million, or $0.40 per diluted share, for the first quarter of fiscal year 2017.

    ‘Operating income of $6.6 million for the quarter ended June 30, 2017, improved $14.6 million compared to an $8.0 million operating loss for the quarter ended June 30, 2016,’ the company reported. ‘Similarly, segment operating income was $6.1 million for the first quarter of fiscal year 2018, up $14.3 million compared to the same period last year, mainly as a result of earnings improvements in the Other Regions segment, partially offset by earnings declines in the North America and Other Tobacco Operations segments.

    ‘Revenues of $284.6 million for the quarter ended June 30, 2017, decreased by $10.9 million, or four percent, on lower total volumes and a less favorable product mix.’

    Freeman said that crop purchases were essentially completed in Brazil and were progressing well in Africa.

    “Overall crop qualities are good,” he said. “We expect increased volumes in Brazil to continue to positively affect earnings throughout this fiscal year. At the same time, greater reductions than expected in Burley crop sizes in Africa and continued challenging market conditions in Tanzania will reduce our volumes sold from that region.”

  • AOI volume stable

    AOI volume stable

    In the three months to the end of June, Alliance One International (AOI) sold about 61.2 million kg of tobacco, about the same amount as it had sold during the three months to the end of June 2016, even though South-American shipments were ‘noticeably reduced’ because there had been only ‘minimal carryover’ of the smaller, El Niño-affected 2016 crops.

    In announcing AOI’s first-quarter results to the end of June, president and CEO Pieter Sikkel said revenue had improved by 6.1 percent or $15.9 million to $277.0 million on that of the quarter to the end of June 2016 due to a 4.8 percent increase in average sales price that was driven by a higher ratio of lamina/by-products sales.

    “Additionally,” he said, “at quarter end, our uncommitted inventory reached a seven year low just inside the mid-point of our stated target range of $50.0 to $150.0 million.

    “Due to selling mainly prior year crops during the quarter that were impacted by currency and smaller crops sizes last year, gross profit decreased $5.4 million to $28.6 million. Excluding the impact of currency movement in Other Regions, gross profit would have been consistent with the prior year.”

    Looking ahead, Sikkel said fiscal year 2018 was progressing favorably and in line with expectations. Excluding Malawi, which had a much smaller crop this year, global market conditions were positive.

    Weather patterns were good, supporting better growing conditions; so that, in key markets where AOI was currently buying, crop sizes had returned to more normal levels.

    Later, Sikkel said that AOI’s customers were focused on enhancing global-supply-chain sustainability and driving positive change in nicotine consumption habits with reduced risk products.

    “Alliance One is well positioned to continue to meet customer requirements for traditional products with directed agronomy investments in systems and people,” he said. “Such investments, as well as others, uniquely position our company as a key supplier for new products our customers are developing and we will continue to invest where appropriate returns should be achievable…”

  • Price up US$0.02 per kg

    Price up US$0.02 per kg

    The average price for flue-cured tobacco in Zimbabwe is running at US$0.02 per kg ahead of what it was in 2016.

    According to a story in The Herald today, growers had so far sold 180 million kg of flue-cured for $532 million per kg, at an average price of US$2.95 per kg.

    By the same stage of last year’s sales season, they had sold 193 million kg for $566 million, at an average price of US$2.93 per kg.

    Of this year’s sales, 149 million kg have been sold under the contract system for US$444 million, at an average price of US$2.98 per kg, while 31 million kg has been sold at auction for US$88 million, for an average price of US$2.84 per kg.

    Although the industry is expecting to have sold about 206 million kg by the end of this season, up from 201 million kg in 2016, flue-cured sales are now being conducted only once a week.

    Early this month, the Tobacco Industry and Marketing Board (TIMB) reduced the number of selling days to two – on Tuesdays and Thursdays – and now, sales will be conducted on Wednesdays only.

    In a statement on Tuesday, the TIMB board said final clean-up sales would be held on August 11.

  • Universal to webcast results

    Universal to webcast results

    Universal Corporation is due to webcast a results conference call from 17.00 Eastern Time on August 3 following the release of its results for the first quarter of fiscal year 2018 after market close on that date.

    The conference call will be hosted by Candace C. Formacek, vice president and treasurer.

    It will be available on a listen-only basis at www.universalcorp.com.

    A replay of the webcast will be available at that site until November 3.

    In addition, a taped replay of the call will be available from 20.30 on August 3 through August 16 at (855) 859-2056, using the telephone replay identification number 59259116.

  • Tobacco production secure

    Tobacco production secure

    Leaf tobacco production is not expected to dwindle despite the Philippines’ government’s introduction almost five years ago of the Sin Tax reforms that were intended in part to discourage smoking, according to a Business World Online story quoting a mayor from the Ilocos region, a key growing area.

    “Tobacco is considered a high-value crop,” Batac City Mayor Albert D. Chua was quoted as saying. “Farmers won’t walk away from it because it’s a cash crop.

    “There are suggestions to reduce the area planted to tobacco and shift to other crops; the problem is that farmers will always plant what is competitive,” he said.

    Data from the National Tobacco Administration, however, is said to show that the law might have been effective up to a point since tobacco production declined from 67.665 million kg in 2013 to 51.947 million kg in 2015.

    Republic Act No. 10351 raised excise taxes on ‘sin’ products such as cigarettes and alcohol in a bid to temper public demand for these products.

    It required that 15 percent of the additional revenue from the increased taxes should be earmarked to ‘programs that will provide inputs, training, and other support for tobacco farmers who shift to production of agricultural products other than tobacco including but not limited to spices, rice, corn, sugarcane, coconut, livestock and fisheries’.

    The Business World story said that, according to farmers interviewed separately, there was still strong demand for tobacco from cigarette manufacturers and distributors, as companies continued to offer them production contracts.

    But the picture seems to be mixed. “Tobacco won’t be abandoned by Ilocanos,” tobacco farmer Agnes Asuncion was quoted as saying. “We have long earned our living from tobacco,” added Asuncion, who nevertheless is a tobacco farmer who diversified into dragon fruit after the Sin Tax reform.